Reducing risk buying into oil through derivatives

Well as some have known, I've been salivating of the thought of getting ready to buy into crude oil once again (Last time I ever even thought of that during the early stages of summer 2014 Lol). Derivatives have notoriously had a bad reputation throughout many educational venues, and rightly so. In my belief, they play a crucial role in the reduction of std. deviation within an investment portfolio. Enough preaching though, well here is the trade I'm looking to take, clearly we can see that price is testing a resistance level around the $20.00 area, so an area where I will be looking to enter the position is on a retracement to the Daily 50 Moving Average support, and at the $16.20 area. Along with these positions I will be examining the options (derivative contracts) on the ETF . The position I'm looking to write covered calls at a higher strike to offset price risk I will be subject to in the near term.

Note: Yes there is talk over whether USO or UPL is better to buy, due to contango / backwardation, etc. But for me personally USO is the better buy due to the fact that the near / medium term forward contracts curve is steadily rising, leaving behind the state of backwardation that saw USO lose more value on a percentage basis then UPL . Roughly 12%-14% rise in the curve from this years May 15 Exp . to Feb17 2016 Exp . And with USO selling / purchasing near term contracts, it makes more sense for me to enter a fund rolling over on the month end contracts vs one purchasing contracts farther our in the curve. Once we reach farther our on the curve, I will examine which fund is a better investment. But other than that I'm confidently bullish on oil due to many fundamental factors (To many to write down).

Cheers =)

Disclaimer: I do not feel comfortable calling out trades that I will be taking through derivatives due to their level of risk. If you don't have a good understanding of them I suggest you grab yourself some heavy reading and study hard, and test them out in a demo account before going live with them.